What are the pro and cons of working directly with a client versus through a consulting agency? [closed]

Question

Never have done any consulting or freelancing work I'm curious what the advantages and disadvantages are. Obviously a consulting company takes a cut on your pay check and may provide some business connections that give your more consulting opportunities. What other differences are there that need to be considered when deciding between these options?

Answer 1

Having worked both for myself only, and through an agency, I have decided that I enjoy both equally, but for different reasons

PROS of an AGENCY

• Constant work
• Less overhead on your end
• No worry about taxes
• Usually the contract with the client is dealt with professionally via the agency (including loopholes, extensions, pay, etc)
• Sometimes, you get Worker's Compensation or other benefits paid for
• Someone else can complete your work at the agency if you fall ill or cannot do the project yourself. This can sometimes also include support from other contractors without costing yourself extra money, just time.

CONS of an AGENCY

• You are not your own boss
• You may not be able to negotiate requirements for projects
• Less money then dealing directly with the client
• You may have an agreement where you are not allowed to pursue clients after leaving the agency

Now, for working for myself:

PROS of my own work

• Negotiate directly with the customer
  (this is especially good when I know the techinical limitations of myself, or the project they are asking for. Many agencies I worked for in the IT industry simply say YES to every request without concern of how long or difficult it may be, or will forget a major component)
• More money
  (this comes with more responsibility, as you need to know every last detail, including promise of delivery times, potential blocks in a project, and any extra costs that may come up with little notice)
• Referrals
  (many of my good clients refer me to their friends' businesses or spouses' businesses, and there is nothing to stop me from getting more clients. Word of mouth is the best form)

Answer 2

A big plus for working through consultancies/agencies is that they tend to have more regular payment terms in force, and because you have a contract with the agency rather than the end client, you can leave it to the agency to worry about whether the client is going to pay or not.

Answer 3

Agencies have much to offer, especially for someone seeking interim/casual work. However, as a Freelancer I value my independence...

One of the biggest CONS of working through an agency is the ambiguity about your status... especially your tax status - which will see you struggling to maintain "self-employed" status with the tax authorities.

Here in the UK there have been several attempts to bring agency workers into the remit of Pay-As-You-Earn (tax deducted at source). I could go on at length about these...

Likewise, at EU level, the Agency Workers Directive seeks to enshrine the same employment rights on agency workers as permanent staff. Which will lower the rate you are paid (someone has to pay for these "benefits"!)

Answer 4

One thing to keep in mind is what would happen should the consulting company go under or no longer send work to you. How would that affect you?

It may, psychologically, keep you in a better, constant state to work directly with clients as opposed to working through a consulting agency and having to scramble to do the administrative tasks that the consulting company normally took care of.